A brand new footwear company called ALLDOGS has made their market debut in 2015 with their flagship product, an all-weather sneaker. It is made of environmentally-friendly materials and retails for $200 USD per pair.

The company has recently announced that as of December 31, 2019, they will start selling ALLDOGS 2, a brand new sneaker that retails for $500 and they will put a significant marketing budget behind it. In fact, the company anticipates a Return on Ad Spend (ROAS), or the amount of dollars in revenue for every dollar of marketing spent, of 3.5x. Their only limitation is that they have $1 Million available to spend in their first month and that spend can only increase at a maximum rate of 15% per month. Additionally, currently it costs the company $175 to produce a pair of ALLDOGS 2. However, they anticipate that once product increases above a total of 1 million pairs, their cost of goods sold will fall to $90 per pair (ie the 1,000,001 pair and beyond will cost $90 to produce) The company currently spends $50 Million per year on selling, general, and administrative expenses (SG&A) and anticipates those costs to be sufficient to support their growth efforts of ALLDOGS 2.

The company is now planning their 2020 and beyond strategy and wishes to accomplish the following milestones:

$3 Billion in MONTHLY sales of ALLDOGS 2

$50 Million in MONTHLY EBITDA from ALLDOGS 2 business

Construct a monthly forecast to support the company's goals and milestones. Assume no interest, taxes, depreciation, or amortization. Assume the following:

1. Forecast starts on January 1, 2020 (remember it's monthly)

2. Price per pair begins at $500

3. Cost per pair begins at $175

4. Marketing ROAS: 3.5x

5. SG&A does not increase (remember it's $50MM per YEAR)

6. Maximum monthly marketing spend on January 1, 2020 is $1MM

7. Maximum month-over-month increase in marketing is 15%

QUESTIONS:

1. ALLDOGS 2 will reach $3 Billion in MONTHLY sales on:

a. March 2021

b. February 2027

c. August 2025

d. February 2024

e. The company never reaches this goal

2. ALLDOGS 2 will reach $50 Million in MONTHLY EBITDA on:

a. March 2023

b. April 2022

c. April 2025

d. June 2027

e. The company never reaches this goal

3. What is the minimum amount of capital (ie money) do ALLDOGS 2 need to execute on this plan?

a. Over $16 Million

b. Over $700 Million

c. Over $100 Million

d. Over $500 Million

e. No amount as the company never reaches this goal

4. How much is the company spending on marketing when (and if) it reaches $3 Billion in Monthly sales?

a. Over $100 Million but less than $300 Million

b. Over $300 Million but less than $700 Million

c. Over $700 Million but less than $900 Million

d. Over $900 Million

e. Never, the company never reaches its goal of $3 Billion in sales

5. In what month does the company experience it's lowest cash position before rebounding higher (ie its lowest cumulative monthly net income)?

a. July 2022

b. October 2023

c. September 2020

d. July 2025

e. Never, the company continues to lose money at an ever increasing rate

Please demonstrate the results in excel